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Michigan Small Business Groups Establish New Association Health Plans

December 10, 2018

In the wake of a rule change by the Trump administration allowing small businesses to band together to purchase large-group health insurance plans, two Michigan small business groups have created TranscendAHP, an association health care plan (AHP).

TranscendAHP, established by the Small Business Association of Michigan (SBAM) and MichBusiness, gives member businesses the option of purchasing health insurance plans that were previously available only to much larger companies.

The two business groups are working with Blue Cross Blue Shield of Michigan and Blue Care Network to offer 10 different large-group health insurance plans to companies with 50 or fewer employees.

‘More Choice, More Access’

In October 2017, President Donald Trump issued an executive order allowing the creation of association health plans, which groups of small businesses, including self-employed workers, may purchase to offer similar health insurance plans as those provided by many big companies to their workers. The change went into effect in June.

Large employers can get better deals from health insurers than small companies can, because firms with more employees are able to spread the risk of payouts over a larger group of people. Association health plans confer that same ability on smaller companies by allowing them to band together to include more employees in the group of people being insured.

‘Next Chapter in Affordable Care’

MichBusiness President and CEO Jennifer Kluge says the partnership with SBAM gives small employers the ability to provide better health care benefits for their employees, a major concern for her group.

“Access to comprehensive health insurance programs continues to rank at the top of small-business owners’ concerns,” Kluge said. “Working together with SBAM gives our members the best solution for the health care needs of their employees.”

Rob Fowler, president and CEO of SBAM, says the two business groups are working together to offer small businesses across Michigan the best health insurance options, with comprehensive coverage and quality networks.

“As a result of these changes in Washington and our historic partnership, the new AHP is the next chapter in affordable care,” Fowler said. “This opens up options for small businesses to negotiate as large groups, as far as plan design and being able to offer us up as one buying group.”

‘A Cost-Saving Measure’

Charlie Katebi, a state government relations manager and health care policy expert at The Heartland Institute, which publishes Health Care News, says AHPs offer a significant financial benefit.

“Association health plans allow multiple employers and civic associations to pool members and offer health insurance to those members as part of a large group,” Katebi said. “This is a cost-saving measure in a number of ways. First, it enables small businesses to spread employees’ health care costs over a larger pool, reducing the cost associated with their individual premiums, and second, groups that pool members can negotiate more effectively with providers.

“Data show employers and other groups that go the association health plan route are able to offer coverage for almost $3,000 less per person per year,” Katebi said.

Cory Compton (thecomptonjr@gmail. com) writes from Cheboygan, Michigan.

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